Panic selling

Everyone tried to sell at once, so
bottom of market dropped out.

The Poor

2nd Major Problem

There was an uneven
distribution of wealth.
42% of families were
below the poverty
line.

Hoovers Response- Didn't believe that the
GVT should play an active role in the
economy. Organized some private
agencies for unemployed.

1931

Hovers response seemed successful, but then the soviets
flooded the world market with cheap wheat (1/2 U.S. price)
in an attempt to get money to pay back Austrian banks (
but price was too low and they couldn't) This resulted in
the BANKERS’ PANIC Austrian banks borrowed from
German banks and appealed to the BANK OF INT'L
SETTLEMENT

Austrian banks and loaning German banks therefore were
forced into bankruptcy # and b/c German banks had
borrowed from Americans, U.S. banks began to go
bankrupt, wiping out life savings of thousands of
Americans

1932 Election

1 out of 4 people were unemployed,
Income was 50% of what it had been in
1929. Franklin D Roosevelt won all but
6 states to win the election by a
landslide.

The New Deal- FDR

The New Deal, this was the name FDR
gave his new plan to fight the great
depression. This plan was a
revolution in American society,
changed way the government
functioned

Step 1 dealt exclusively with
the banking issues. Many
banks were shut down and
inspected and weren't
allowed to re open until
were seen as "healthy".

Step 2 was more about
reforming the stockmarket,

Step 3 was to put more $ into circulation
for the country, FDR went off the gold
standard.